25.04.2025 Lab leader, market ascender: China's rise in biotechnology

Key findings

  • Biotechnology has been a priority sector for China for two decades and is now promoted as a leading technology of the "new-quality productive forces." Public funding for research in the field has been consistent and generous, totaling at least CNY 20 billion (EUR 2.6 billion) in 2023. Judged by leading publications and Patent Cooperation Treaty (PCT) patents, China’s innovation capabilities have surpassed Europe in most biotech areas, and the US in some.
  • China’s research and innovation capabilities in biotechnology are ahead of its domestic demand in healthcare, chemicals, energy, agriculture and other downstream markets.
  • China’s biotech sector needs access to overseas markets and investors, especially for its most advanced products. If this access is increasingly limited, China’s biotech sector is at risk of confinement to the lower and middle ranges of the supply chain. Currently, China’s main strengths are in areas where cost effectiveness is key, particularly in manufacturing active pharmaceutical ingredients, in providing contract research and in generating so-called me-too and me-better versions of existing treatments.
  • European and American pharma firms have been investing heavily in Chinese biotech companies. This illustrates the growing innovativeness of China’s biotech sector, which benefits from a range of government incentives.
  • The potential benefits to public health, the environment and Europe’s economy from collaboration should be harnessed where possible. The rapid development of testing kits, treatments and vaccines during the Covid-19 pandemic also underscores that collaboration with China, however difficult, leads to better outcomes for patients. There is more room for global collaboration than in some other areas of critical technology.
  • Europe needs to match the strategic intent and policy support China offers its biotech sector, by both strengthening the environment for local capital investments and ensuring that collaboration serves EU interests.

Source: Merics
You can find the full studie here.